After Walter Mondale got crushed by Reagan, pundits made a big mistake. And the country's never been the same since

March 14, 2015 4:00PM (UTC)

Your calendar says it’s 2015, but it’s always 1984 in mind of the New Dems. These are the economically conservative Democrats that include centrists like the old Democratic Leadership Council, Third Way and financial sector-centric elected Democrats (plus Robert Rubin, the Rubin-launched Hamilton Project and associated advisers on the policy side). As always, they are again invoking 1984 to conjure images of a grave danger to Democrats’ ability to win elections in the form of ascendant progressive populism.

The New Dems’ scare story goes something like this: In 1984 Walter Mondale lost 49 states because he ran as a Super Liberal. Democrats would have kept losing if the New Dems had not formed to take control of and steer the party. In 1992 Bill Clinton ran as Centrist Man and Democrats started winning elections again. Now, economic progressives who prioritize other things before Wall Street’s approval are causing trouble. If these progressives Democrats represent the party it will again be banished to the political wilderness and forced to relearn the lesson of the '80s and '90s.

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This premise is not only wrongheaded, in important ways it’s backwards. The temptation not to relitigate something that is, after all, over 30 years in the past is obviated by 1984’s continued role as the go-to cudgel against progressive Democrats. The New Dems’ reliance on the ’84 cautionary tale is illustrative of an under-appreciated dynamic in the struggle between the progressive/populist coalition and the Wall Street wing: there never really was a big, public “fight for the soul of the party” in the 80’s and 90’s. While Bill de Blasio's election in New York and Rahm Emanuel's unexpected struggle in Chicago, along with the prominence of Elizabeth Warren, may seem like a lot of gained ground in short time, it’s not Too Much Too Soon. It’s long overdue.

Wall Street Dems have always been vulnerable to confrontation but they’ve had the good fortune to largely avoid it. As a latent opposing coalition rallied through the demonstration effects of visible progressive populists is rising to challenge the New Dems they’re trying to tap into longstanding progressive self-doubt, warning Democrats who basically agree with the progressives that acting on their conviction would ultimately do harm to causes they care about. Many of the lingering doubts among progressives about the present moment, while understandable, are to a large degree a product of a conventional wisdom forged in the 80’s that was and is mostly baseless. As Democratic losses demoralized the party faithful, the New Dems’ shifted from trying to sell their agenda on the merits to claiming that their self-proclaimed “centrism” was the only way a Democrat could hope to win. (They were fond of stating the obvious truth that a candidate can’t do too much to advance anything good or help stop anything awful, unless they can first get elected -- as if it was some kind of discussion-ender that proved their claim that only New Dems could win.) Unfortunately, their assertions were all too rarely challenged and quickly gained traction, prominence and, finally, conventional wisdom status. Challenging them now may be late but better late than never.

Forever 1984

James Carville has pleaded with Democrats to “forget about 1984.” If more progressives and Dems cross-examine the 1984 story, the New Dems are going to wish they had taken Carville’s advice. A more realistic accounting of 1984 than the prevailing story involves the three people who have probably done the most to drag the Democratic Party to the right (and Wall Street’s idea of the “center”): Al From (the DLC’s founding ideologue), William Galston (the DLC and Third Way) and the New Dems’ economic policy guru Robert Rubin. From and Galston routinely portray 1984 as a harsh truth Democrats had to reckon with or face electoral irrelevancy.

Mondale’s loss is linked to Carter’s by From to create a series of seemingly similar losses that cried out for the DLC to take over the party. The losses are similar but not in the way From claims. As an adviser on inflation in the Carter Administration From served the most economically conservative post-war Democratic president. His thinking was well to the economic right of Congressional Democrats. By From’s own characterization, he was one of the more aggressive voices in the inflation debate within the Carter White House. Though he would go on to cast himself as a purveyor of essential strategic insights, From writes in his book "The New Democrats and the Return to Power" that to him inflation strategy memos were besides the point. Just get inflation down now. “Nothing else mattered.”

Carter was warned by other Democrats that appointing Paul Volcker as chairman of the Federal Reserve would be a mistake. They feared Volcker would go overboard in his fight against inflation and the ensuing recession would doom the party in 1980. Carter went with the From school and appointed Volcker, who throttled interest rates triggering a recession. As Dean Baker, an economist with a very good track record and political instincts to match put it to me, Volcker was not messing around. One easy to understand way to the environment as Volcker’s actions set in is that it was not dissimilar from when Lehman Brothers failed in 2008. Set aside progressive voices advocating a sectoral approach, oil prices, “discredited” Keynesianism and the confluence of events in this era. Even those who agreed with From should have been able to see the predictable political consequences of what Volcker did coming. Policy, like restrictions on credit cards in the winter of 1980, was guaranteed to be met with political backlash. Ironically, Volcker is now seen as closer to the progressive side of economic policy debates largely, and to his credit, because of his relatively strong views on financial regulation. Still, when Paul Volcker is the stalwart economic progressive in a room it’s an indication of how far the nominally Democratic debate lurched to the right at the national level.

Volcker’s timing as a contributor to Carter’s loss should not have eluded anyone involved in the debate, especially From. Instead Carter’s loss served as the opening salvo in From’s case for the necessity of the New Dems. From writes that following Carter, “the Democrats were no longer viewed as the party of prosperity,” which should not be surprising considering a Democrat was in the White House during the onset of the first of the two Volcker recessions. Of course the party in the White House is going to bear the brunt of the blame and everything they say and do will be seen through the prism of the economic insecurity they’re associated with.

The "false cause fallacy" is From’s stock-in-trade. A bad thing happened and Al From was sad. His friends in the White House lost their jobs (which couldn’t have been a pleasant experience, but was not in and of itself proof of anything). When a good thing eventually happened it had to be due to what Al From had done in the interim. And what From was doing before the bad thing happened is irrelevant. That’s just science right there.

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By the time the 1984 cycle began Walter Mondale had already become more of a Jimmy Carter Democrat as Vice President, going from someone more in line with Congressional Democrats and a potential bridge to the member of Carter’s team dispatched to tell Dems what the Administration was doing. Mondale, who still believes his Robert Rubin-flavored deficit pitch was correct on the merits, ran a “new realism” campaign that came down to a noun, a verb and deficits and debt. He went so far as telling people who were more focused on a jobs deficit than a budget deficit that “the only way to get hope” for America was “to get these deficits down.” The Democratic platform underwent a real shift from 1976 and even 1980 under Carter to the bang-up job done in 1984. The convention issue of Congressional Quarterly declared it the “most conservative platform of the last 50 years.” The New Dems should love the national iteration of Mondale. In a number of ways he was their poster candidate.

Robert Rubin, then of Goldman Sachs, worked on the Mondale campaign. It was Rubin’s Wall Street wing that convinced Mondale to say the line that was later portrayed as the height of economic liberalism by the New Dems. This was confirmed by Mondale to Robert Kuttner. At his most visible moment Mondale would embody a caricature of a hair shirt-dispensing neoliberal, giving a speech that wore his deficit obsession as a badge of honor. “Mr. Reagan will raise taxes, and so will I. He won’t tell you, I just did.”

The Wall Street Journal and paragons of Beltway “centrism” David Broder and the New Republic lavished praise on Mondale for this. Note that there is no discretion in whose taxes are going up and the deficit is portrayed as the sum of all economic policy virtue. The latter is a New Dem tick that we see to this day. Voters will mirror elected officials’ stated concern for the budget deficit, especially when leading politicians in both parties constantly talk about it, but voters generally see deficit reduction as shorthand to express their legitimate “I’m falling behind” sentiment. They do not vote on it and definitely don’t monitor CBO reports (note: public opinion of where the deficit is headed does not track with where it is actually headed). Instead they’re rightly focused on good jobs, their income and their overall economic security. No one, except for pundits in DC and big donors on Wall Street, really cares about the deficit.

By the time Mondale gave this speech, the economy was rapidly recovering from the second Volcker recession. Interest rates dropped and so in turn did unemployment which was in turn followed by Reagan’s recovery in public opinion. After not being particularly popular for the first part of his first term, Reagan’s approval rating climbed from low 40s territory in early 1983 to the mid-to-high 50s around Election Day 1984. It was in this context that Reagan would claim 49 states. Only at the very end of the campaign did Mondale return to Minnesota, his home state and the one state he would barely carry and put the Minnesota progressive populist tradition on display. But in the prevalent analysis of what happened Volcker’s timing and Mondale’s Rubinism would be largely ignored in favor of a political spectrum positioning take advanced by the DLC. William Galston, who served as Mondale’s issues director and had long been harboring a positioning-based theory of elections, claimed the results weren’t the rejection of a man but a party and its philosophy. After 1984, lead New Dem Gary Hart emphasized that he was not Hubert Humphrey or Eleanor Roosevelt. This says a lot about the New Dems and none of it is good. Humphrey had clashed with Carter over the moves that ended up sealing the fate of Carter and his Vice President Mondale in consecutive elections. Public opinion polling continued to show the New Deal in the form of Social Security and the minimum wage to be highly popular, while deficit fetishism had utterly failed to persuade or mobilize.

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The New Dems’ supposed vindication came when Bill Clinton won in 1992. But one could make a strong argument that Bill Clinton ran as more of an economic populist than the extreme deficit hawk Mondale or the windfall profits tax-repealing technocrat Mike Dukakis before him. It wasn’t until Robert Rubin, Alan Greenspan and people like conservaDem Lloyd Bentsen prevailed over Clinton’s earlier political advisers soon after the election that Bill Clinton became the Rubinite he is now remembered as in more progressive circles. Clinton would return to a more populist form to successfully run for re-election as the determined defender of Medicare, Medicaid, education and the environment.

Today, We Are All Walter Mondale

The hits keep coming. In more recent years New Dems have tried to apply the 1984 “lesson” to whatever political moment they’re in. Before declaring itself the New DLC (because in their mind the word “new” is some kind of magic incantation) and then ultimately folding and giving way to Third Way, the DLC tarred Democrats with the pejorative “member of the unelectable Mondale wing.” The trait that earned a Democrat this label circa 2003 was opposition to the Iraq war, a sin no Democrat with serious future national aspirations could commit lest they consign themselves to irrevocable Not President status. Anyone who would have suggested to the DLC that the next Democrat to win the White House would be a Hyde Park State Senator named Barack Obama elected in large part because of his opposition to the Iraq war would have been met with all sorts of political spectrum positioning-based derision.

In 2006 Kentucky populist John Yarmuth was written off by then-DCCC chair Rahm Emanuel as too progressive to win. Yarmuth won and has remained outspoken in the House while winning re-election ever since while, for the record, Rahm’s prized Blue Dogs have seen their ranks decimated multiple times over (and Rahm himself is now struggling to hold onto his own mayoral seat in Chicago). In 2012 Matt Cartwright ran as a proud economic progressive FDR Democrat challenging 10-term incumbent Blue Dog Rep. Tim Holden for the Democratic nomination in Pennsylvania’s newly redistricted 17th District. When Cartwright prevailed economic conservaDems in DC warned that Cartwright’s win could herald an era of unelectable Democrats ousting them in primaries. Cartwright defeated his Republican opponent in the general election by 22 points.

On the national level, Bill Daley, possibly the quintessential JPM Dem, who has gone from from JPMorgan to Third Way (if that can be considered a journey at all — it really shouldn’t be), to a disastrous stint as Obama’s Chief of Staff, to dropping out of a Democratic primary in Illinois to pre-empt losing, wrote a typical warning in the Washington Post citing the defection of Alabama conservaDem Parker Griffith as a sign that the party was moving away from a position from which it could win. Alabama Democrats acted in accordance with Daley’s wishes and got Parker back, nominating him for Governor in 2014. Griffith lost by 30 points then quickly commenced blaming the “far left.” To paraphrase a common saying about conservative ideology in Democratic quarters, New Dem “centrism” cannot fail, it can only be failed.

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From its rise to its present reign in DC, New Dem dogma has turned a blind eye to a litany of examples in many of the very places that give the party a majority in Congress and the electoral votes to put the nominee over the top in a presidential race. Tom Harkin’s five Senate wins in swing state Iowa; Sherrod Brown’s two in Ohio; Paul Wellstone and Al Franken’s two each in Minnesota; Russ Feingold’s three (look for a fourth if he runs in 2016) and Tammy Baldwin’s win in Wisconsin. Baldwin is joined by Jeff Merkley, Tom Udall, Elizabeth Warren, Sheldon Whitehouse and Mazie Hirono in the group of progressive Senate Democrats who have defeated so-called “moderate” Republicans states ranging from purple to light blue to deep blue.

New Dems love to cite the relatively low number of Americans who self-identify as “liberal.” This trick will get harder to pull off if that number continues trending upward as it has been. More to the point, if we’re going to assign so much meaning to the response to a single label then the outstanding performance of the similar label “progressive” need to figure into the mix. Surely Galston, who pops up with his trusty liberal self-identification metric every time Democrats get assertive, is aware of its existence. Other New Dems even rely on it. From named the DLC’s think tank the Progressive Policy Institute, countering the charge that the DLC was conservative. Andrew Cuomo launched Operation Just Say “Progressive” A Lot soon after he was elected. More to the point, it’s hard to believe that New Dems who supposedly spend their time looking at every angle of how Democrats can win elections could fail to account for the symbolically conservative but operationally liberal voter, a concept that has been around for quite some time.

To be clear, the progressive populism that New Dems and their funders despise is not an electoral cure-all. The fundamentals are still going to set the range of possible outcomes. But at minimum, progressive populism is not the positioning drag on Democratic candidates the New Dems make it out to be and in swing regions like the Upper Midwest it’s the best way to mobilize and persuade. The New Dems’ main angle, the one they’re working now by speaking in ominous tones about the specter of a redux of 1984 that exists only in their heads, is vastly overstating the role political spectrum positioning plays in deciding elections -- and then getting where voters actually are on issues that resonate with them wrong, once again, even to the point of getting it backwards. We’re talking about self-“centrists” who constantly betray their burning desire to cut Social Security benefits, one of the most toxic and broadly unpopular domestic policy ideas in American politics.

The Fight for the Heart and Soul of the Democratic Party That Wasn’t, the Real Fight for the Heart and Soul of the Democratic Party That Will Be

The fight for the economic direction of the party that has only began in earnest in recent years is lopsided one. While there have always been a form of conservative Democrat, from the Bourbon Dems to Al Smith’s persona vendetta against FDR to Dixiecrats to “Boll Weevils” and Atari Dems to Blue Dogs and New Dems, they’ve never been this at odds with the Democratic voting and activist base -- or the views of the majority of the country on a majority of major economic issues. The progressive/populist coalition is the result of the New Deal and Civil Rights Act. You can see a clear through-line in elected Dems from Hubert Humphrey to Tom Harkin to Sherrod Brown, Elizabeth Warren and Tammy Baldwin in the Senate and Xavier Becerra, Marc Pocan, Jan Schakowsky and Donna Edwards in the House. The other side of the proverbial battle comes down to big donors from the financial sector and those who see it as paramount. They have little voting or organizing constituency to speak of. They do have two things. The first is tons of money. The second is a choice between two major parties. The Legion of Hedge Fund Mangers tends to be socially liberal and elected Republicans who see the debt ceiling as an inviting hostage and government shutdowns are a fun thing to do make them nervous so maximizing their influence in the party that is not home to Louie Gohmert is an obvious play for them to make but that’s all it really is. Don’t expect the New Dems to admit any of this though. If a Democratic party more in line with its voters on economic issue can win (and it can) what’s the point of organizations like Third Way?

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As the 1984 fable is meant to scare progressives and Democrats who basically agree with Elizabeth Warren away from asserting themselves, it’s worth saying that for those who lived through the 80’s losses (disclosure: they started before my time), losing 49 states and having the Mondale story be something Everyone Knows in DC had to seem either convincing or daunting to confront even for those who may have suspected it of being of dubious origin. Even the most committed progressive Democrat would have had a lot of thinking to do and mitigation must have had a lot of appeal. Russ Feingold is no one’s idea of a slouch in the political courage department but as he made the early rounds for a presidential run that he ultimately did not make in the 2008 cycle, his answer to the national media about his ability to win a general election nodded to the prevailing wisdom by saying that although the New Dem lesson might have applied in the 80’s and 90’s he did not think it still held up in the way it may have before. In Democratic circles the stalwarts of New Dem-ism (Pat Caddell, Dick Morris, Mark Penn) are seen as punchlines even as the edifice they built is treated with undue reverence. It’s natural for people who experienced 1984 and the fallout from it to not want to face the prospect that they’ve acted in fear of what amounts to a paper tiger. But that fear would only be something for a progressive to be ashamed of if it continues to the point that it determines course of action once one realizes what the beast we’re asked to cower before is made of.

There’s always going to be a place in DC for those who are paid to translate the seething anger financial sector donors have for Elizabeth Warren into something they can attempt be pass off as honest, well-intentioned advice to Democrats. There will probably always be someone who seeks to show how Very Savvy they are by coming to the conclusion that progressives should live in perpetual fear of their own shadow and then searching for developments to apply their conclusion to. The same can probably be said of the vast majority of the pundits who parrot the talking points of Third Way en route to patting themselves on the back for committing an act of Beltway centrism. All of this is to be expected. Its existence should not, however, be a deterrent.

Progressives’ willingness to challenge entrenched corporate interests has been tempered by a sensitivity to strategic imperatives, both real and imagined. The alertness to strategic imperatives is certainly not a bad thing, but it turns inimical if exploited by agents of corporate interests who share with liberals a nominal party but not really their values -- and definitely not their goals. We know that they are more than willing to craft disingenuous appeals to liberals' sense of caution. Nor is their anything wrong with hearing out the New Dems’ strategy arguments so long as all Democrats are aware of their track record and bottom line motivation. Over the course of the Obama presidency there have been many real time debates about strategic choices involving Third Way.

Press them for an example of their pronouncements that was vindicated in a real time debate, and they won’t be able to produce one. What they have done is, on a number of instances, shamelessly changed their rationale for why elected Democrats need to do what Third Way’s donors wanted Democrats to do. They do this because New Dems organizations like Third Way are not on a mission to get Democrats to win elections. They’re on a mission to lock Democrats into serving high finance, even at the expense of winning elections. The New Dems are not acting out of concern that progressive populist Democrats will lose. They don’t want liberals to win.